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JPMorgan, Citi See an Economic Grind Rather Than a Spiral

JPMorgan, Citi See an Economic Grind Rather Than a Spiral

(Bloomberg) — Two of the biggest U.S. banks are gaining confidence that the pandemic won’t send the economy into a calamitous slide, even if they see a long path back to growth.

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JPMorgan Chase & Co. and Citigroup Inc. set aside just $2.87 billion for loan losses in the third quarter, less than half what analysts expected and even lower than the charge-offs they had this period, in part because they’d already been aggressive in beefing up their reserves in the first half of the year. The lenders said they’ve been encouraged as consumers have been quick to pay down their credit-card bills and corporate borrowers have repaid the revolving credit lines they tapped at the start of the lockdowns.

Executives are still cautioning that the economy is in for a long grind: JPMorgan said it expects to see material losses in its consumer portfolio starting in the second half of next year, later than initially anticipated. And Citigroup said unemployment will probably be higher at the end of next year than initially expected.

But the banks’ actions indicate that some of the worst outcomes are now less likely to occur in the near-term even with the pandemic dragging on and lawmakers failing to agree on another round of fiscal stimulus.

“Our base case has improved a bit, but uncertainty is still high, 20 million are still unemployed,” JPMorgan Chief Financial Officer Jennifer Piepszak said. “We don’t think we’ll see real material losses emerge until the second half of next year because the consumer is in good shape.”

The smaller provisions helped JPMorgan and Citigroup notch better-than-expected earnings in the third quarter. Still, shares in both companies fell as investors worried that the quarter signaled a pause in pain from soured loans, rather than the end of the

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Stock Market Today With Jim Cramer: JPMorgan Is the Best Bank

Stock Market Today With Jim Cramer: JPMorgan Is the Best Bank

Stocks were lower Tuesday as investors were discouraged by a stalemate over fresh government aid and bank shares declined following earnings reports.

The Dow Jones Industrial Average fell 84 points, or 0.29%, to 28,753, the S&P 500 was down 0.38% and the Nasdaq declined 0.02%.

TheStreet’s Katherine Ross discussed breaking news in the stock market on Street Lightning. Cramer spoke about the earnings of both Citigroup and JPMorgan as well as the impact of the restructuring at Disney.

JPMorgan: Buy Or Sell?

JPMorgan Chase & Co.  (JPM) – Get Report posted stronger-than-expected third-quarter earnings Tuesday as the bank set aside a much lower amount to cover ad loans amid an improving domestic economy.

JPMorgan CEO Jamie Dimon also said the bank could resume its share buybacks in the first quarter of next year, depending on changes to the Federal Reserve’s cap on shareholder returns, which was extended until the end of 2020 earlier this spring.

Cramer said he didn’t see a lot of growth in JP Morgan. “They’re doing well. They’ve got the fortress balance sheet. They’re without a doubt the best bank. But I think they’re not going to have anything near what Goldman has. Goldman is a training operation.”

Citigroup: Buy Or Sell?

Citigroup’s  (C) – Get Report earnings for the three months ending in September were pegged at $1.40 per share, down 32.3% from the same period last year but firmly ahead of the Street consensus forecast of 93 cents per share. Group revenues, Citigroup said, fell 6.8% to $17.3 billion, edging just ahead of analysts’ forecasts of a $17.2 billion tally.

Cramer said Citigroup is perceived as being a dark horse. “It yields 4.6%. It has a $71 tangible book value. It’s seemingly impossible that you’re going to have such a bad

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The stock market won’t see the bullish outcome it’s expecting from a Biden win unless there’s a full blue wave, a JPMorgan stock strategist says

The stock market won’t see the bullish outcome it’s expecting from a Biden win unless there’s a full blue wave, a JPMorgan stock strategist says

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Traders look on after trading was halted on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 18, 2020


  • JPMorgan Private Bank’s Monica DiCenso told Bloomberg on Friday that the stock market won’t see the bullish outcome it’s expecting from a Biden win unless there’s a blue wave victory. 
  • The head of US equity strategy said that it will be difficult for Biden to pass a large stimulus bill without Democratic control of the Senate. 
  • The stimulus would also offset higher corporate taxes that are likely under a Democratic administration, she said. 

JPMorgan Private Bank’s head of US equity strategy told Bloomberg on Friday that the stock market won’t see the bullish outcome it’s expecting from a Joe Biden victory unless there’s a full blue wave outcome.

“It does appear increasingly likely that we see a blue wave and I think that is what the market is pricing in right now when you see equities continue to move,” Monica DiCenso said.

The strategist explained that it will be much harder for Biden to pass a large stimulus bill without Democratic control of the Senate, and said: “I really do think you probably need the blue wave for the real bullish outcome that many people are talking about to come to fruition.” 

DiCenso added that the stimulus, combined with continued low interest rates, will be the “perfect backdrop for equities over the near to intermediate term.”

While some investors are nervous that a blue wave will be negative for stocks because Biden’s corporate tax hikes will crush company earnings, DiCenso said the stimulus spending will offset higher taxes.

Read more: Fund manager Brandon Nelson is tripling his benchmark in 2020 with ‘less-discovered’ companies that become big winners. Here are 3 themes and

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